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The real way to buy a business!!

Discussion in 'Business Operations' started by J Hisch, Feb 25, 2004.

  1. J Hisch

    J Hisch LawnSite Senior Member
    Posts: 952

    There is so much controversy over how much to buy an existing lawn care company for. The main problem is everyone is wanting a return on their money like yesterday, which is good, but in reality many business don't even profit for 3-5 years sometimes less in the service industry. But we need to quit thinking way to much. My advise is if you can purchase a business and make money off of it by the end of the year it would be a good buy. I would imagine any business man out there would be willing to purchase a company if they could already begin to get a return on their investment within 8-9 months? Not a bad investment......So think of it like this, if you are a risk taker and thats what business is risk taking. If you can purchase a company and begin to profit on it by the end of the year I would say it is a good purchase. You need a smooth transition though, meet every customer tell them what your company can do for them. Also before you say someone is out of their mind in paying their asking price ask yourself how much would you sell your business for? I have bought companies before.. It has paid off. Their are not many venture out their where you can begin to get a return off of investment in 9 months, I buy all I can.. then I re-sale the equipment I don't want.
  2. MacLawnCo

    MacLawnCo LawnSite Bronze Member
    Posts: 1,847

    Good points... only bad asumption is that owners are business men, which in most cases isnt the case thus you run into the situations we are trying speak against. Too many want to be a landscaper and not a businessman :(

    In terms of net profit, assets, and liabilities.. what is the consensus on what a business is worth...

    1, 2, 3+ years net plus assets less liabilities??? anyone gona bite here?
  3. promower

    promower LawnSite Bronze Member
    Posts: 1,232

    I agree with MacLawn. If someone totally new at owning a buisness jumps right into full swing without expeirence I think its overwhelming. An excellent landscaper/poor buisnessman will more then likely fail. If I would have started my first year with 75 customers I dont I would have done as well as the 35 I started with. Even with only 35 I was a mess, I didnt know how much I was really making, no organization, I had know idea what I was doing besides knowing I just knew how to do the work. I know my numbers better now, I know what to expect and how to handle things 100% better then I did my first year. I think buying your own equipment and getting your own accounts is the only way to go. If your talking about buying someones company to add to your own existing LCO well then I agree with you J hirsh.

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